Results of the eleventh Annual Public Sector Reporting Awards have been published

Eleven years ago, the Southern African Institute of Government Auditors (SAIGA) introduced a series of important awards in the public sector to recognize the pursuit of excellence in annual reports published by all provincial and national departments.

The Awards are called the Annual Public Sector Reporting Awards (or SAIGA Reporting Awards). The SAIGA Reporting Awards project produces twelve awards:

• one for the best report of a national department
• one for the best provincial department (for each of the nine provinces)
• one for the most consistent highest score over the last three years
• a twelfth award is made for the department obtaining the overall highest score.

This year's overall winner with the highest score of 97.16% is the Western Cape Department of Agriculture.

Previous winners were - 2011: Western Cape Department of Agriculture; 2010: Mpumalanga Department of Finance; 2009 & 2008: the Free State Department of Sport, Arts & Culture; 2007: the national Department of Education; 2006: the Free State Department of Health; 2005: the national Department of Sport & Recreation; 2004: the Free State Department of Health; 2003: the national Department of Housing; and 2002: the Department of Provincial & Local Government.

The full list of 2012 winners for the financial reporting year ended 31 March 2011 is:

Professor Dieter Gloeck, Executive President of SAIGA and Chairperson of the Award Committee, praised the high scoring departments and pointed to the overall sustained improvement in adherence to reporting standards since the inception of the awards eleven years ago.

Consistent scores of above 90 percent are evidence that government departments apply the highest reporting standards - often confused with and overshadowed by media reports of mismanagement of funds and corruption. Whilst the occurrence of corruption and mismanagement is by no means condoned, positive publicity should also be given to achievements which relate to good accountability.

The proper disclosure (according to the reporting standards which are evaluated by the SAIGA Reporting Awards) of information relating to, for example fruitless and wasteful expenditure, irregular and unauthorised expenditure is after all the main source of information for the public debate: full sunshine enables and empowers.

Since the competition in this year's SAIGA Reporting Awards was intense, special mention should also be made of departments which achieved a high score, but were not category winners. SAIGA has therefore decided to publish a "Top 20" list.

The overall average score recorded by all departments this year is 87.17%. A shade down from the previous record in 2011 (87.44%), but still one of the highest average scores in the eleven year history of the Awards. Average scores in other years were: 2011: 87.44; 2010: 87.25%; 2009: 87.36%; 2008: 86.34%; 2007: 84.95%; 2006: 86.0%; 2005: 82.83%; 2004: 80.49%; 2003: 75%; 2002: 70%.

The high percentages are even more impressive if one takes into account that the number of evaluation criteria are steadily being increased as departments are required to disclose more detail in their annual financial statements. In the first year of the competition the maximum number of points was 410 marks compared to the 776 points this year (2011: 754).

A record total of 45 departments scored above 90%. In the first year of the Awards only three departments scored above 90% and in the second year only one department. The number of departments scoring above 90% in other years were: 2011: 41; 2010: 42; 2009: 39; 2008: 35; 2007: 21; 2006: 25; 2005: 19; and in 2004:11.

The "Top 20" list shows that the competition was stiff - the lowest percentage in the Top 20 is 92.65 %. This is also the second year in a row that all top 20 departments have a score above 90%. This year's average score of the Top 20 departments is 93.79% - the highest ever.  Previous averages were: 2011: 93.23%; 2010: 91.94%; 2009: 92.06%; 2008: 91.98%;

2007: 90%; 2006: 90%; 2005: 89%; 2004: 88%; 2003: 83%; 2002: 79%. It now seems that the top departments are consolidating around the 90% plus mark which is a remarkable adherence percentage.

This year 5 departments (2011: 9; 2010: 8; 2009: 6; 2008: 8; 2007: 14; 2006: 8; 2005: 9;2004: 8; 2003: 14; 2002: 27) did not qualify as their audit reports contained a disclaimer/adverse opinion. No individual province stands out in terms of disqualifications - all five are from different provinces (Eastern Cape, Limpopo, National, North West, Northern Cape).

Last year SAIGA was concerned about the poor availability of the financial statements for public use. In 2011 a total of seven departments (Eastern Cape: 5 and North West: 2) were disqualified from the Awards due to the fact that their annual financial statements were not available (SAIGA works in co-operation with the Auditor-General to obtain the statements and also made numerous unsuccessful requests to the departments concerned to obtain the statements). The situation improved this year and only one department in each of the above mentioned provinces had to be disqualified due to their statements being unavailable (North West: Provincial Legislature and Eastern Cape: Human Settlements). In 2010 one department was disqualified for "unavailability".

The departments in the Western Cape recorded the highest average of 92.36%. The same province topped this list in 2011, 2010, 2009, 2008 and 2007. Seven of the Western Cape departments feature in the Top 10 Most Consistent list. The province with the lowest score is Northern Cape with 81.27. This province now replaces North West as the lowest scoring province (2011).

In contrast to 137 departments achieving sustained high scores by adhering to public sector reporting standards (above 70%), eleven departments underperform by recording scores below 70%. In the first year of the Award (2002) only 47 departments exceeded the 70% barrier (2003: 91; 2004: 122 ; 2005: 134; 2006:142; 2007:147; 2008:145; 2009: 144; 2010:

145 and in 2011 138 departments scored above 70%). As in previous years the national Parliament recorded a low score of 59.15% (2011: 69.50%). Only the Gauteng Legislature recorded a lower score: 44.07%. The lack of adherence to reporting standards by these two legislatures, and our country's national Parliament in particular, is cause for concern.

The prestige of achieving the most consistent high performance award over the last three years again goes to the Department of Education in the Western Cape (also the winner of this Award in 2011).

SAIGA's Executive President highlighted the fact that the statutory performance reporting requirements of the Public Finance Management Act (PFMA) and the Treasury Regulations provided the South African public with a wealth of information not only about the financial results of the departments in an understandable format, but also gave a detailed account of the objectives which were set and whether or not these objectives were met. Further information which has to be disclosed includes reasons for non-performance and actions taken to rectify the situation.

"If the financial and performance disclosure requirements are compared to those of the private sector and especially listed companies which attract investments from the general public, it becomes clear to what extent the private sector accountability arrangements lack behind the public sectors'. Yet the media awards hardly any attention to the achievements in terms of financial reporting in the public sector" remarks Gloeck.

The SAIGA Reporting Awards are now firmly established and have become a highly visible instrument and benchmark to monitor public accountability and transparency in national and provincial departments.

Background information

The Awards have been tailored according to similar projects and practices world-wide. SAIGA is managing this project with the support and co-operation of the Accountant-General as well as the Auditor-General.

The Award Panel and the Technical Award Committee is constituted from SAIGA office bearers, experts in the field of public sector reporting, representatives of the Office of the Accountant-General and the Auditor-General. The fact that the Awards are managed and administered by an independent Institute which has been active in the public arena for the last fifteen years adds the much desired elements  of  independence and credibility to  the Awards.

The quality assurance relating  to  the technical analysis and evaluation, is done by the Department of Auditing, University of Pretoria.

By-products of the Awards are the development of additional performance criteria (in the field of accountability and reporting) and benchmarking of reporting practices. The results of the evaluation process and the information so gathered will assist with the development of further guidelines for reporting and an increased public awareness of changes to the government's reporting practices.

Highly relevant developments are aligned to this project: i.e. the foundation of the Accounting Standards Board, introduction of internationally best accounting practices and higher compatibility of financial statements between the private and public sectors.

Criteria for the Awards

Research by the Technical Award Committee identified the following principal characteristics that form the basis of good financial reporting: understandability, comparability, relevance, reliability and technical correctness.

The resultant criteria selected and weights used in assessing the financial statements and key issues in the annual reports for the year under review, are summarized in the table below.

Criteria and weights for annual reports and annual financial statements:

Other items contained in the annual report, but not necessarily in the prescribed format of the annual financial statements, were also considered for the award (see bottom of the table above). These items were selected based on the view of the relative importance of these items in the annual report as a whole, as well as the anticipated future importance of the individual items. An adequate weight of 83 points  was  awarded  to  these  items  (they  include,  for  example,  performance  information  and information in the audit committee report).

Financial statements published with an audit report that contained a disclaimer or an adverse opinion, were disqualified from the Awards.

Statement issued by Prof Herman de Jager (Secretary) and Prof Dieter Gloeck (President), Southern African Institute of Government Auditors, October 9 2012

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